Correlation Between Trupanion and NI Holdings
Can any of the company-specific risk be diversified away by investing in both Trupanion and NI Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Trupanion and NI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trupanion and NI Holdings, you can compare the effects of market volatilities on Trupanion and NI Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Trupanion with a short position of NI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trupanion and NI Holdings.
Diversification Opportunities for Trupanion and NI Holdings
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trupanion and NODK is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Trupanion and NI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NI Holdings and Trupanion is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Trupanion are associated (or correlated) with NI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NI Holdings has no effect on the direction of Trupanion i.e., Trupanion and NI Holdings go up and down completely randomly.
Pair Corralation between Trupanion and NI Holdings
Given the investment horizon of 90 days Trupanion is expected to generate 2.9 times more return on investment than NI Holdings. However, Trupanion is 2.9 times more volatile than NI Holdings. It trades about 0.03 of its potential returns per unit of risk. NI Holdings is currently generating about 0.03 per unit of risk. If you would invest 5,137 in Trupanion on August 27, 2024 and sell it today you would earn a total of 223.00 from holding Trupanion or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trupanion vs. NI Holdings
Performance |
| Timeline |
| Trupanion |
| NI Holdings |
Trupanion and NI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trupanion and NI Holdings
The main advantage of trading using opposite Trupanion and NI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trupanion position performs unexpectedly, NI Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NI Holdings will offset losses from the drop in NI Holdings' long position.| Trupanion vs. First American | Trupanion vs. Assurant | Trupanion vs. NMI Holdings | Trupanion vs. MGIC Investment Corp |
| NI Holdings vs. Horace Mann Educators | NI Holdings vs. Donegal Group A | NI Holdings vs. Global Indemnity PLC | NI Holdings vs. Selective Insurance Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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